Building growth momentumthrough personal health solutions

Roy JakobsChief Business Leader Personal Health

Key takeaways

• Our leading Personal Health innovations enable healthier lifestyles and

support living with chronic disease

• We are executing on key levers to drive profitable growth:

– Growing the core, through geographical expansion and increased

penetration

– Unlocking value through direct digital consumer engagement, leading

to higher brand preference and recurring revenues

– Extending the core with innovative solutions and new business

models to address unmet consumer needs

• We target 5-7% organic growth while delivering 17-19% Adj. EBITA

margin by 2020

2

Unique strengths create sustainable value

Consumer behavior

Increasing engagement in own health

Consumption patterns

Personalization will become the new mass market

Industry dynamics

Shifting retail landscape and new business models

Trusted brand Innovation and IP portfolio Leading in online, local presence

Building on unique strengths

Personalized experience economy Agility in business & operations

3

>70% of sales from leadership positions>30% of sales1 online, doubled over last three years

Health & Wellness

EUR 1.5 billion sales

Oral Healthcare

Global leader

Sleep & Respiratory Care

EUR 2.0 billion sales2

Personal Care

EUR 1.9 billion sales

Domestic Appliances

EUR 2.3 billion sales

Mother & Child Care

Global leader

Healthy Sleeping

Global leader

RespiratoryCare

Global leader

Male Grooming

Global leader

Beauty Appliances

Global leader

Food Preparation

Global leader

Home Care

Global leader

1 Excluding Sleep & Respiratory Care; 2 Including EUR 0.4 billion hospital respiratory business reported within Connected Care & Health Informatics4

Our roadmap drives superior consumer valueAddressing rapidly changing consumer behaviors through innovation and high-impact marketing

5

Customer and operational excellence enables investment in strategic growth initiatives and innovation

Unlocking value through Direct2Consumer engagement

Extending the core with solutions and business models

Growing the core

Professional recommendation Personalized health solutionsProduct innovation

Digital engagement platforms New business modelsGeographical expansion

Philips S9000 PrestigeShave with uncompromised closeness and skin comfort

Innovation• Our best shaver yet, superior skin comfort driving our

global share in the growing premium segment

Product innovation

6

Philips Sonicare

Leveraging strong portfolio with >75% of sales from #1 positions in key geographies

• Central & Eastern Europe: Reinforcing our dental-professional recommendation

• Mexico: Driving penetration, unlocking new channels

Philips Sleep & Respiratory Care

Delivering high-double-digit growth in underpenetrated markets, leveraging our scalable global expansion model

• Brazil >35%

• India >25%

• China >20%

We are driving growth and recurring revenues, gaining scaleThrough geographical expansion with proven propositions

Philips OneBlade

Addressing unmet consumer needs and geographies via new channels

• Global roll-out to 33 countries in the last two years

• ~45% of sales from new distribution channels with recurring revenues

OneBlade established a new consumable category, towards EUR 200M sales in 2018

7

>80% of the world’s population still brushes manually

>80% of patients suffering from Obstructive Sleep Apnea are not aware today

Geographical expansion

8

Professional recommendation

Philips SonicareCapturing full potential of the oral care domain

Innovation• Multiple propositions seamlessly integrate into

consumers’ daily life and routines through suite of product offerings

High-impact marketingLeveraging professional endorsement as our competitive advantage:• Philips Sonicare Most Often Recommendation grew +3%

pts. globally in 2017• We launched Sonicare Teledentistry Service in the US,

providing a remote dental consultation by licensed dentists

Pregnancy+ by Philips AventBridging consumers directly into our Mother & Infant franchise

Innovation• Delivering the best-in-market pregnancy solution • Direct advertising within Pregnancy+• Real-time interactive 3D foetus feature

High-impact marketingThe world’s largest digital parenting platform• >20 million downloads• >3 million monthly active users• >45% of all pregnant women in the UK, Germany and

Brazil use the app• Daily engagement with highly relevant content

Digital engagement platforms drive consumer loyaltyBuilding brand trust and consumer intimacy whilst increasing lifetime value

9

Digital engagement platforms

Innovation• Connects homecare providers, physicians, payers and

patients living with chronic sleep and respiratory conditions

• Enabling the care of >8.5M connected patients worldwide • Philips cloud-based management systems convert data

into actionable insights so care teams can make better, faster, more informed decisions

Philips Care OrchestratorOptimizing care management in the home to improve outcomes

10

Personalized health solutions

Philips Lumea Prestige – Try & BuyAccess over ownership, turning consumers into users

Innovation• Expert Intense Pulse Light hair removal technology at

home, developed with dermatologists• Proven safe and effective treatment• The Lumea App helps create a personalized treatment

schedule per body area

High-impact marketing• Flexible subscription allowing consumers to switch from

access to ownership, pilots unlock up to 25% additional users

• Try & Buy resolved key barriers to purchase via lease options, increasing earnings per user by >30%11

New business models

Key takeaways

• Our leading Personal Health innovations enable healthier lifestyles and

support living with chronic disease

• We are executing on key levers to drive profitable growth:

– Growing the core, through geographical expansion and increased

penetration

– Unlocking value through direct digital consumer engagement, leading

to higher brand preference and recurring revenues

– Extending the core with innovative solutions and new business

models to address unmet consumer needs

• We target 5-7% organic growth while delivering 17-19% Adj. EBITA

margin by 2020

12